Umbrella Insurance


People buy insurance to recover quickly from unexpected tragedy. Most people I know don't have millions setting in an account to be used to settle a jury award. We buy a liability policy to transfer at least some of that risk to an insurance company.

Accidents happen; it is part of life. Unfortunately, lawsuits will be a consequence whenever the accident is severe enough to cause bodily injury or property damage. I advise my clients to think of liability insurance as an "if I am sued" coverage.

Worry, regret, and possibly guilt are just a few of the emotions that come to mind. Liability coverage with a reliable insurance company will provide at least some relief to the anxiety. Your insurance carrier has a duty to defend you, even if the claim is bogus. And should you be found liable, they will pay damages on your behalf up to the limit you have chosen (as long as the occurrence is not excluded, and happened within the policy period).    

The question becomes, how do you choose a limit for liability insurance?  Making that determination is difficult for obvious reasons. It is impossible to predict the severity of the incident, or the amount of the damage award. However, a good starting point would be to think about the value of your assets and what you could potentially lose. Choose a limit of liability that will shield those assets that you have worked so hard to obtain.

Purchasing an umbrella policy is also an essential method of shielding your assets. When you face a serious liability issue, an umbrella policy can feel like your rich uncle coming to protect you. He says, “bring it on. I don't care if you are sued because of an auto accident, a general liability claim, or an employer's liability claim. If your claim reaches a level beyond your liability limit for the underlying policies, I've got you covered.” You can visualize it this way:

                             UMBRELLA $2,000,000     

Auto Liability     General Liability     Employers Liability

  $500,000          $1,000,000       $500,000

An umbrella policy is an excellent method of minimizing your risk, for both personal and business liability. The cost is very reasonable because it is only used in the worst of circumstances. It is important that the underlying coverage meets the required limits to avoid a potential gap in coverage. If you would like more information or an insurance review, please let me know.

Ordinance or Law


After the wildfires swept through Gatlinburg,TN in 2016, many businesses faced a loss of revenue when local authorities forced them to remain closed during the extensive clean-up.  Those with ordinance or law coverage and loss of business due to an ordinance or law were covered for the loss of income during that period.

Building ordinance coverage, also known as ordinance or law coverage, is an important consideration when evaluating property insurance.  This is particularly true when insuring a historic or older building.  When damaged by a covered loss, commercial property policies will pay to rebuild the actual physical structure to the condition at the time of loss.  However, an unendorsed property policy will exclude the increased cost of construction that is associated with local, state, or federal building codes.  For example, the Americans with Disability Act (ADA) became law in 1990.  Buildings constructed prior to 1990 are likely not compliant with this law. 

It is also important to know the building ordinances in the area where the building is insured.  Many communities require a building damaged 50% or more to be demolished.  Some communities will require plumbing, electrical, and HVAC systems be upgraded when the building is reconstructed.

This potential gap in coverage can result in an unexpected, large out-of-pocket expense.  A properly endorsed property policy can eliminate or reduce this kind of loss. 

Building ordinance coverage has three parts:

·         Coverage A - Coverage for Loss to the Undamaged Portion of a Building: This comes into play when the loss has not affected the entire building.  The commercial property policy covers “direct physical damage to covered property”.  The undamaged part of the building would not fit that description because it did not suffer a physical loss, but the value of the property has been diminished.  Local ordinances may not allow this portion of the building to be repaired.  Coverage A will provide money to tear down the undamaged portion so the entire building can be reconstructed.


·         Coverage B - Coverage for the Cost of Demolition: This provides money for the demolition and removal of debris.  In Northeast Tennessee, the average cost to demolish a building is roughly $4-$8 per square foot.  There are many considerations that are factored into that estimate such as accessibility to the property, the type and weight of the building materials, the distance to the waste disposal site, and whether hazardous materials, such as asbestos or lead is involved.  The cost rises to roughly $9-$11 per square foot for an older building.  Keep in mind that is cost is per square foot.


·         Coverage C - Coverage for the Increased Costs of Construction: This provides for the increased cost of construction to comply with local, state, and federal ordinances. 

Though it can be difficult to balance cost with adequate coverage limits, properly endorsed building ordinance coverage will limit the cost of lost revenue or unplanned out of pocket expenses resulting from demolition and increased reconstruction costs due to local, state and federal ordinances. It is also important to reevaluate coverage annually to make sure policies are up-to-date with changes in the law.